A PLUS Loan is a federal loan available to graduate students and
undergraduate students looking to help fund their continuing college education. PLUS Loans help students to cover costs related to tuition fees, rooming and boarding costs. What are the most obvious advantages of PLUS loans? They are guaranteed loans from the government and like all federal programs, feature more favorable interest rates and more humane terms on the loan. PLUS loans have a fixed interest rate of at least 8.5% as regulated by the government. Some lenders that work with PLUS loans actually discount the interest rate more with their rewards programs.

You may be wondering what are the primary differences between a PLUS loan and other types of federal loans such as the Stafford and Perkins loan. At first glance, these loans are similar. All of these loans are federally based and in accordance with the Higher Education Act of 1965. All of these loans are available through the Federal Direct Student Loan Program as well as through a private lender that works through the Federal Family Education Loan Program. Lastly, all of these loans can consolidated through the College Consolidation Loan program.

What are some of the major differences? Unlike the Perkins and Stafford loans, which feature deferred payment, repayment is due immediately after the grace period and there is only interest rate term. The PLUS loan has slightly higher interest rates than other loans. On the "plus" column of PLUS, the amount offered by PLUS loans can cover the entire cost of a college education, including living expenses. This is in contrast to federal loan programs that only offer partial loans. Different repayment plans are available, but none of them offer 0% interest rate or any accrual relief. Also, when you deal with PLUS plans the parent assumes more responsibility. For instance, when a parent takes the loan program it will become a commitment for the parent instead of the student.

The final difference is that PLUS loans factor in good and adverse credit for the qualification process. This may make PLUS loans easier to qualify for, but still no less easy to get, since many students have no credit. Since parents can apply for PLUS loans on behalf of students however, this problem can be avoided. EasyAid is a company that helps students find PLUS loans as well as other types of federal loan programs that can help fund continuing education.